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Mortgage Comparison Calculator

Compare two mortgage offers by monthly payment, points, closing costs, total interest, lifetime cost, savings, and break-even timing.

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Better total cost
Loan B costs less over the full term
$34,678.79
Loan A monthly payment
$2,075.51
Loan B monthly payment
$1,970.30
Monthly difference
$105.22
Lifetime cost difference
$34,678.79
Loan A
Rate and term
6.75% for 30 years
Upfront cost
$2,500.00
Total interest
$427,185.01
Total cost with upfront fees
$749,685.01
Loan B
Rate and term
6.25% for 30 years
Upfront cost
$5,700.00
Total interest
$389,306.21
Total cost with upfront fees
$715,006.21

Loan B's extra upfront cost breaks even after about 31 months if you keep the loan that long.

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Mortgage Comparison Calculator

Two mortgage offers can look almost identical until you translate the rate, term, points, and fees into dollars. The mortgage comparison calculator does that side by side. Enter one loan amount, then enter Loan A and Loan B with their rates, terms, discount points, and other closing costs. The result includes the monthly payment for each loan, the monthly difference, the lifetime cost difference, each loan’s upfront cost, total interest, and total cost with upfront fees.

This tool is for comparing loan offers, not estimating the entire housing payment. Use the mortgage calculator or mortgage calculator with taxes and insurance for escrow items. Use the mortgage interest calculator when you want to isolate interest on one loan. If one option is adjustable, stress-test the reset separately with the ARM mortgage calculator.

What counts as a fair comparison

For the cleanest rate comparison, keep the loan amount the same for both offers. If one lender rolls fees into the balance, either add those fees to that loan amount in a separate scenario or include them in the closing-cost field consistently. Points should be entered as a percentage of the loan amount. Other closing costs should include lender fees you want to compare, not taxes or prepaid escrow amounts that would be similar regardless of lender.

The calculator assumes fixed-rate amortization for both loans. It does not model future refinancing, prepayments, taxes, insurance, or changing ARM rates. That simplicity is useful because it separates the core loan economics: payment, interest, points, and fees.

Formula

For each loan, the monthly payment is:

payment=loan amount×monthly rate×(1+monthly rate)months(1+monthly rate)months−1\text{payment} = \frac{\text{loan amount} \times \text{monthly rate} \times \left(1 + \text{monthly rate}\right)^{\text{months}}}{\left(1 + \text{monthly rate}\right)^{\text{months}} - 1}

Upfront cost is:

upfront cost=loan amount×points100+other closing costs\text{upfront cost} = \frac{\text{loan amount} \times \text{points}}{100} + \text{other closing costs}

Lifetime cost is:

lifetime cost=payment×months+upfront cost\text{lifetime cost} = \text{payment} \times \text{months} + \text{upfront cost}

Total interest is scheduled payments minus the loan amount. The winning loan is the one with the lower lifetime cost in this model. If Loan B costs more upfront but has a lower monthly payment, the note reports the approximate break-even month.

Checking a mortgage comparison scenario

Assume a $320,000 loan amount. Loan A is 6.75% for 30 years, with 0 points and $2,500 of other closing costs. Loan B is 6.25% for 30 years, with 1 point and $2,500 of other closing costs.

The calculator estimates Loan A’s monthly payment at $2,075.51. Loan B’s lower rate produces a monthly payment of $1,970.30. The monthly difference is $105.22 in favor of Loan B. Loan A has an upfront cost of $2,500.00. Loan B has $5,700.00 upfront because one point equals $3,200 on a $320,000 loan, plus the same $2,500 of fees.

Scheduled total interest is $427,185.01 for Loan A and $389,306.21 for Loan B. Total cost with upfront fees is $749,685.01 for Loan A and $715,006.21 for Loan B. Loan B costs $34,678.79 less over the full term. Because Loan B costs $3,200 more upfront and saves about $105.22 per month, the extra upfront cost breaks even after about 31 months if you keep the loan that long.

Pros, cons, and decision risks

The strength of this comparison is that it prevents rate tunnel vision. A lower rate with high points can be a good deal for a long holding period and a poor deal for a short one. A higher monthly payment on a shorter term can save a large amount of interest but strain cash flow. A no-point loan can look expensive over 30 years but preserve cash for repairs, reserves, or moving costs.

The risk is that lifetime scheduled cost assumes you keep the loan until payoff and never refinance or prepay. Many borrowers sell, refinance, or make extra payments before the full term. That means break-even timing and expected holding period may matter more than the full-term winner. The calculator’s result should be combined with your plan for the home, your emergency fund, and the likelihood of future refinancing.

Tips for comparing offers

Request Loan Estimates on the same day so market-rate changes do not distort the comparison. Separate lender-controlled fees from third-party charges and escrow deposits. Ask whether points are optional or required for the quoted rate. Compare APR, but also compare dollar costs because APR can be hard to interpret when loan terms differ. If one quote is a jumbo loan, verify the conforming threshold with the jumbo loan calculator. If one quote is interest-only, run the payment shock in the interest-only mortgage calculator before relying on the early payment.

Method scope and source version

Jurisdiction-neutral loan mathematics; lender contracts, disclosures, taxes, insurance, PMI, and compounding conventions vary. Evergreen method only; defaults/examples must not be represented as current market, legal, tax, or institutional data. The sources below support the stated method and definitions; they do not supply a live rate, quote, legal conclusion, lender offer, or institution-specific policy.

Sources

Frequently asked questions

What does the mortgage comparison calculator compare?
It compares two fixed-rate mortgage offers using the same loan amount. For each loan, it calculates the monthly principal-and-interest payment, upfront cost from points and other closing costs, total interest, total cost with upfront fees, and the lifetime cost difference.
How are mortgage points handled?
Points are entered as a percentage of the loan amount. The calculator converts them to dollars and adds them to other closing costs. One point on a $320,000 loan is $3,200. Points affect upfront cost, not the payment formula directly.
What does the break-even note mean?
If Loan B has a higher upfront cost but a lower monthly payment, the calculator divides the extra upfront cost by the monthly savings. The result is the approximate number of months needed for the lower payment to recover the extra upfront cost.
Does this include taxes, insurance, or PMI?
No. It compares loan offers only: principal, interest, points, and closing costs. Escrow items such as taxes, homeowners insurance, mortgage insurance, and HOA dues should be added separately when you are planning the total housing payment for either option in your budget.
Which loan should I choose if I may sell soon?
A lower lifetime cost may not matter if you sell or refinance before the break-even point. If your holding period is uncertain, compare the monthly difference, upfront cost, and break-even month. The lower-fee loan can be safer for short timelines and uncertain moving plans.

Related calculators

Mortgage Points CalculatorEstimate discount point cost, lower-rate payment savings, break-even months, net savings during your expected stay, and lifetime savings after point cost.Mortgage Refinance CalculatorCompare a current mortgage with a proposed refinance, including new loan balance, closing costs, cash out, payment savings, break-even time, and term trade-offs.Refinance Break-Even CalculatorEstimate the number of months required for refinance payment savings to recover upfront closing costs, plus net benefit over your planned holding period.Refinance CalculatorCompare an existing loan with a replacement loan, including refinance costs, cash in or cash out, monthly savings, interest, and break-even timing.Mortgage Interest CalculatorEstimate total mortgage interest, first-month interest, starting payment, total payments, and a simple fixed or ARM interest scenario.Rent or Buy CalculatorCompare renting and buying over a planned stay using rent, deposit interest, purchase price, mortgage terms, transaction costs, appreciation, and sale proceeds.

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